Oreo Fearlessly Disrupts Itself to Grow via D2C Ecommerce: A ‘Colorfilled’ Holiday

Tradition can be blinding … 

If you’ve ever done something better than everyone else — especially for 103 years — the idea of starting over, reinventing how you do it, and getting everyone excited about rebuilding from scratch sounds impossible or even misguided.

Ideas like these are the stuff of wayward dreamers rather than rational doers, right? 

But disrupting itself is exactly what Mondelez International, makers of Oreo, tasked Lauren Fleischer to do with the cookie everyone loves to dunk. 

Much of the infrastructure would need to be built from scratch. So would the supply chain and logistics.

For the first time ever, Mondelez wanted to sell Oreo cookies directly to consumers by offering a unique customized packaging. And, it all had to be done in just a few weeks …

“There were thousands of reasons this could fail,” Fleischer recalls. “Initially, we saw a lot of ‘negative brainstorming’ with people listing everything that could go wrong. We had to turn that thinking upside down. Instead of simply listing risks, we had to find a way to embrace and solve every potential problem.”

It’s what Fleischer would soon discover about Oreo packaging that would make the task seem even more impossible.

The Trending Vending Machine

It’s hard to teach an old brand new tricks.

But years before Mondelez even thought about selling Oreos direct to consumers, the company could sense a shift in consumer behavior.

Gone were the days of patient consumers willing to accept what companies create for the masses. In was the on-demand, real-time, and personalized world made possible by technology and revolutionized by a burning desire to stand out rather than blend in.

Today’s consumer is much different from the one buying Oreos a century ago.

“Brands either have to adapt or become irrelevant,” Fleischer concedes. “Selling via ecommerce is not just another channel, it’s a new way to do business and a whole new way for us to sell.”

Mondelez first dipped its toes into customization two years earlier at the South by Southwest festival and conference.

To test whether Oreo might be able to capitalize on trends like on-demand 3D-like manufacturing and customization, Oreo set up a cookie making tool it dubbed The Trending Vending Machine.

The machine allowed people to create their own Oreo cookie based on things that were trending on Twitter. Each trend corresponded to a particular flavor combination and allowed for more than 10,000 custom combinations. The personalized Oreo would then be created as the Oreo lover watched.

“People stood in line two hours for a chance to create their own Oreo cookie,” Fleischer says. “The team knew right then that there was something to this trend toward customization.”

The problem was figuring out how to scale such a dynamic B2C offering. Even more challenging; doing it in just two months …

The Oreo War Room

Oreo is the premier brand at Mondelez and has a history of marketing opportunistically and in real time.

Remember the blackout during the 2013 Superbowl when Oreo knocked it out of the social media park with its Dunk In The Dark tweet? It’s an example of an agile marketing team with an uncanny ability to capitalize on real-time branding opportunities that are still praised years later.

Power out? No problem. pic.twitter.com/dnQ7pOgC

— Oreo Cookie (@Oreo) February 4, 2013

But building a B2C startup practically overnight is a challenge even this team wondered if it could pull off.

This is a project that normally would have taken us two years, but we had this entire project set up in just two months.

Valerie Moens, Corporate Affairs at Mondelez International

It started with the formation of a team.

Fleischer was the project lead and began plucking the best and brightest from Mondelez; ecommerce talent, marketers, packaging designers, as well as help from several agency partners.

“We were building a business from scratch,” Fleischer says.

Next, came the formation of a dream.

In what came to be known as The Oreo War Room, Fleischer and her team battled over ideas and whether they could be done in the few months allotted for the project. “It got heated at times,” Fleischer admits. “We basically locked ourselves in there for a week until we figured out a way to say, ‘Yes. We can make this happen.’”

What emerged was a vision dubbed Oreo Colorfilled, a nod to the momentum built from the WonderFilled marketing campaign of the prior two years urging cookie lovers to unlock moments of childhood wonder with Oreo.

The idea was to allow Oreo lovers to personalize their experience with the brand by building their own Oreo packaging on a special website just in time for Christmas.

The plan would call for a series of firsts: the first time …

• Oreo had been sold direct to consumer (D2C)
• Oreo packaging would be completely customizable
• Consumers could add a personal message to the wrapper

The team worked with artists to create a black and white design consumers could use as a canvas. Users are able to zoom in or out as they pleased to include or exclude specific characters.

Users can add their favorite color to the packaging, top their Oreo with a holiday-themed accessory, and include a personal message on the package:

Each package is unique, no two are exactly the same, there are an infinite number of combinations.

“The Oreo tool is just fun to play with,” Fleischer adds. “It’s also a really good example of a big brand being nimble, moving fast, and creating something from scratch very quickly.”

The plan was a good one. The goal was to launch the customization project in approximately two months.

Too bad Fleischer and the team had no way to package, ship, or accept payment for their custom Oreo packages.

Finding the Perfect Oreo Colorfilled Factory

Mondelez makes millions of Oreo cookies a day. But it has never made them like this …

Ordinarily, Oreo packages come twelve per box. Remember, Mondelez is a B2B company and has perfected supply chain management and bulk shipping methods that allow it to benefit from efficiencies of scale. Afterward, Mondelez relies on retail business partners for the final leg of distribution.

The Oreo Colorfilled project meant bypassing all of this infrastructure and institutional knowledge to begin anew.

This really went against our grain, we just weren’t equipped to make and ship custom orders directly to consumers.

Fleischer and her team couldn’t even make custom orders at the company’s existing facilities. It’s why the crew had to find a brand new place to manufacture, package, and ship the B2C orders.

The Colorfilled team quickly found a warehouse with potential. Two weeks later the warehouse had been transformed into an Oreo cookie factory almost ready for its first ever foray into ecommerce.

Almost …

“We had to fully change our supply chain,” Fleischer says. “Instead of shipping twelve packages to a box, we had to retool so we could ship one package to one customer.”

The packaging itself, the very portion of the experience that empowered customer customization, would prove to be an obstacle. “Each package needed to contain and protect 36 perfect cookies,” Fleischer says.

If Oreo lovers were going to go invest time and energy in designing their own packaging and be willing to pay more for the joy of doing so, Mondelez had to be sure the packaging would be strong enough to protect the cookies from potentially rough rides in FedEx trucks.

The company also had to ensure the packaging would be cost-effective...

Luckily, a Mondelez packaging engineer sacrificed an entire weekend to save the project. Not only did she design and hand cut a new box that was sure to protect and impress, but she reduced the cost of manufacturing the box by 77%.

The custom Oreo packages were ready to ship safely and cost effectively.

Problem solved! That is until Fleischer and the Colorfilled team encountered a brand new problem they had never experienced before...

An Ecommerce Solution

“It’s extremely scary thinking about accepting payments,” Fleischer says. “We were worried we wouldn’t be able to finish the project on time because we weren’t able to accept payments direct from customers.”

To sell direct to consumers, Mondelez would need a partner it could trust to protect credit card numbers and personal information belonging to customers. Mondelez had never before required Oreo lovers to provide payment and personal information.

Not only did the Colorfilled team need a partner that could provide a safe and easy checkout experience, it also needed an ecommerce platform that would allow each customer to create a unique product in real time.

To meet both needs, Mondelez chose Shopify, a cloud-based enterprise ecommerce solutions provider for high volume merchants.

It was a relief when Shopify showed us all of the ways it protects the personal information belonging to customers, our onboarding representative, Brian Donohue, has been so patient with us and helpful in alleviating our concerns.

Besides a seamless checkout, the Shopify interface provided Mondelez the ability to offer a level of customization that surprised some within the company. The API offered a set of tools that helped Mondelez offer a functional yet flexible way for consumers to personalize their experience with the Oreo brand.

“You can really customize with Shopify because its API is like no other,” Fleischer boasts. “Every time a package is customized it’s like the customer is making a unique product that we have to build on the fly. Not only does Shopify provide us with the functionality we need, but the Oreo packaging tool is also fun to play with.”

To be able to create thousands of unique SKUs that easily, it was a really powerful value unlock and a reinvention of how we sell that was worth celebrating.

The Launch: ‘My phone was dying every 15 minutes’

“It might be selfish but I was actually Colorfilled’s first customer,” Fleischer admits with a grin. “I was the first order and sent the first customized Oreo package to my mom and dad!”

It had been a long sleepless night before that first order though.

Prior to the official launch, Fleischer and her team had stayed awake much of the weekend improving the site, adding functionality, and designing the best user experience possible under the time constraints.

It wasn’t perfect and it would still need to optimized, but — when the team officially launched Colorfilled — it figured it could finally rest after an exhausting two-month sprint.

“But it was such an adrenaline rush there was no way I could go to sleep,” Fleischer says.

Equally impossible for Fleischer would be to remain a bystander as the orders began coming in at the Oreo factory she had helped create. “There is absolutely nothing more satisfying than that first order,” Fleischer recalls. “I was actually in the plant packaging orders myself and it was incredible actually seeing them in the boxes we made just for this.”

The orders were coming in so rapidly Fleischer actually had to deactivate the push notifications the Shopify app was sending her phone for each order. “We were getting so many orders my phone was dying every 15 minutes.”

If it seems as if Fleischer and the Colorfilled team were in ecommerce heaven, things were even better for some of the Oreo die-hards creating custom packaging.

In fact, some of the personal messages customers were adding to their customized packages were stunning:

• Marriage proposals
• Pregnancy announcements
• Heartfelt messages to parents

Oreo’s customization project was quickly turning into something much bigger; an opportunity for the brand to play a role in major life events that would be remembered and revered for lifetimes.

“People who love Oreo are co-creating with the brand in ways they never have before,” Fleischer says. “We’re so excited by the response and seeing this level of creativity from consumers.”

A Fearless Future

“We have a mantra around here and it’s all about being fearless,” Fleischer says proudly. “We market fearlessly which means we’re disrupting the status quo to accelerate growth in ways that are also meaningful to customers.”

That fearlessness is what inspired the Colorfilled team to compete against its century-old parent company and create a brand new D2C experience customers just can’t get in a store. 

The Colorfilled campaign has become a guide for future ecommerce growth at the company.

“We have huge ecommerce ambitions,” Fleischer teases. “I have never worked on a project that unlocked this level of childhood joy before. I’m exhaustedly energized because we’ve overcome so much but aren’t resting on our laurels. Doing this just makes us want to do more and do it even better.”

Disrupting a successful company from within, especially one with such a rich tradition, and building a startup culture from scratch is a risky and scary prospect.

It’s one thing to tell the world you’re fearless. It’s another to actually prove it with your cookies.